TPPI secures $950 million loan

JAKARTA (JP): PT Trans-Pacific Petrochemical Indotama (TPPI) has received signed commitments from seven banks to arrange and underwrite a US$950 million financing for its $2.3 billion olefins and aromatics complex near Tuban in East Java.

Bank of America Asia Ltd., one of the lead arrangers, said in a release here yesterday that the $950 million loan funds would be underwritten on a pro rata basis with each lead arranger institution underwriting $135.71 million.

TPPI is an Indonesian petrochemical joint venture company, which is 10 percent owned by PT Tirtamas Majutama, 60 percent by Trans Pacific Petrochemicals Ltd. (an affiliate of Tirtamas), 20 percent by Tuban Petrochemicals Ptd Ltd. (a subsidiary of Siam Cement Public Co. Ltd.) and 5 percent each by Nissho Iwai Corp. and Itochu Corp.

The other six lead arrangers are Banque Nationale de Paris, Deutsche Morgan Grenfell (Singapore), DKB Merchant Bank (Singapore), Fuji Bank, Sanwa Bank and Societe Generale Asia.

A significant portion of the loan financing will be supported by export credit agencies, including the U.S. Export-Import Bank and the Export Credit Guarantee Department (ECGD).

The balance of the financing has been allocated to other export credit agencies, including the Export-Import Bank of Japan, to Japanese trading companies and to Indonesian banks. The project is scheduled for completion in mid-1999 with an annual capacity of three million tons of olefins and aromatics.

When completed, the TPPI complex will be Indonesia's first integrated olefins and aromatics facility. PT Chandra Asri in